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February 26, 2010

"'Midwest Madoff' sentenced to 9 years"

The title of this post is the headline of this new article from the St. Louis Disptach. Given that the fraudster discussed in the article is female, I suppose she should be glad she is not being called a "Mrs. Madoff" as well as being glad that she got a sentence that's barely 5% of what Bernie Madoff received. Here are the specifics of this case:

A $900 tanning bed for show pigs and a barn cooling system to encourage thick, prize-winning coats in cattle were but two of the personal items bought by the woman who committed the largest agricultural fraud in Missouri history, investigators said Thursday.

That woman, Cathy M. Gieseker, 45, was sentenced in federal court here to nine years in prison on a single mail fraud charge for bilking at least 179 Missouri farmers out of more than $27 million. She pleaded guilty in November. District Judge Charles Shaw and others in court Thursday referred to her as the "Midwest Madoff," a derisive reference to Wall Street swindler Bernard Madoff, who stole billions in a pyramid scheme.

Gieseker, who lived in Martinsburg, Mo., in Audrain County, claimed to have a special deal with agricultural giant Archer Daniels Midland that let her broker crops for premium prices. Farmers turned over their crops to Gieseker, who promised to later pay them a high return for their yield.

Officials said that she had no such arrangement and that Gieseker merely churned money to pay her early customers with cash collected for the crops of later ones. It was a classic pryamid scheme, they said.